I am the beneficiary of a revocable living trust set up by my mother. Mom passed away in Dec 2009. I am planning filing the normal 1040 for her for tax year 2009. Correct approach? Also, I am aware that any income of the trust is taxable to me as ordinary income from this point forward, correct? And lastly, how do I account for distributions to me of the assets of the trust< i.e, if the trust has $200K in liquid assets and I take a distribution of this amount, do I need to account for this anywhere, this year or later on? Thanks

Answer: W - Based on what you have written, it appears that you are very much on track.

Assuming that there is a filing requirement, filing a final personal return for your mother is correct. There are some specific notations you will need to make on the return to let the IRS know that this is the final personal income tax return for your mother.

Income that the assets generate once the assets became yours are income to you and should be reported accordingly.

The value of what you have inherited should it be property or cash is not income to you and does not appear on your tax return. Generally, the fair market value on your mother's date of death becomes your cost or basis in the asset.

I suggest the you read through IRS Publication 559, Survivors, Executors, Administrators. This publication will cover many of the details concerning the questions you have asked.

You can view, print, download or order this and other publications and forms at www.irs.gov.